Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

A Challenging 2020 Ahead But Greater Opportunities for Occupiers

  • Office market conditions to generally turn more occupier-friendly as the COVID-19 outbreak impacts the global economic outlook
  • Markets with limited supply, such as Taipei and Ho Chi Minh City will be less severely impacted from the outbreak

Cushman & Wakefield has released their APAC Office Report: Outlook 2020, which has indicated greater opportunities for occupiers despite a challenging 2020 ahead resulting from the COVID-19 outbreak. An overall economic slowdown in Asia Pacific appears inevitable in 2020, but occupiers will likely enjoy declines in rental levels and enhanced lease terms.

The COVID-19 pandemic has exacerbated office market cycles, particularly in those markets where availability has been rising. As a result, most key markets in Asia Pacific will turn more occupier-friendly. As landlords scramble to protect long-term tenant relationships and defend against increasingly attractive incentive packages from their competitors, the negotiation ball is now more firmly in the occupiers’ court.

James Shepherd, Head of Research, Asia Pacific, stated: “As seen in all major territories, governments and central banks around the region have been responding to the situation with policy measures and financial aid to mitigate the economic impact. With China now appearing to be succeeding in controlling the outbreak at home, the World Health Organization believes that it is still possible to change the trajectory of the pandemic.

Assuming this scenario holds, and the global economy experiences a stimulus-fuelled rebound, we can expect office leasing activity to pick up in H2 and beyond as normal business activity gradually resumes. Although some local markets have started to show signs of recovery, global economic headwinds are likely to temper this.”

In Greater China, an influx of supply had recently prompted a downward rental trend in Shanghai, Beijing and Guangzhou. Given the impact of COVID-19, rentals are expected to slide further. For Hong Kong, the outbreak deals a second blow to a property market already weakened from social unrest. The premium office market is expected to remain under pressure over the near-term.

Rental growth is likely to be weak in Sydney, Australia, over 2020 due to the economic impact of the pandemic. However, relatively muted supply and low vacancy suggest growth can return relatively quickly with economic recovery. In contrast, rents are nearing peak in the current cycle in Singapore. Despite lower market confidence, landlords have been able to hold their rents steady for the moment due to tight vacancies and limited upcoming supply. Global economic and geopolitical uncertainties are also taking a toll on the ability of companies to secure budgets for relocation and expansion, limiting the demand for office space.

Dr. Hideaki Suzuki, Head of Research & Consulting, Japan, said: “An increase in vacancies can be noted in Tokyo, Japan, currently at historical lows of below 2%, and is pending as tenants look to move into new projects, and secondary vacancies rise. Consequently, as a result of the outbreak, the market is braced for a change in direction.

“Asia Pacific became the first region to experience the real economic repercussions of the COVID-19 outbreak. China’s GDP growth will be dented, which in turn will exert economic stress on the Asia Pacific region and the global economy. However, a rebound in economic activity is expected to prompt a gradual return to pre-outbreak office market conditions by 2021.”

Click HERE to view the full report.

Related Insights

APAC Inclusive Cities Barometer
Insights • Sustainability / ESG

Inclusive Cities Barometer

Singapore stands out as a top performer in the Inclusive Cities Barometer, renowned for its exceptional urban planning, safety, and cultural diversity.
Dominic Brown • 10/06/2024
Insights • Economy

Navigating Southeast Asia's Economic Growth: Trends Challenges and Opportunities

The Southeast Asia economy is expected to grow by 4.6% in 2024, faster than 2023’s growth of 4.0%. What is shaping the economic and real estate landscape of Southeast Asia, and what are the trends that are shaping the region's future?
Xian Yang Wong • 13/05/2024

APAC Data Centre Update

The operational capacity of Asia Pacific’s* data centre markets has surpassed the 10GW mark, with ~800MW of new supply added in H2 2023 bringing the total regional live capacity up to 10.6GW. We continue to witness a robust development pipeline with 3.9GW under construction throughout the region and 9.4GW in planning stages, which is an increase of ~900MW since our last update.
Vivek Dahiya • 15/02/2024
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All